Trade Talks A Tradeoff For U.s.

WASHINGTON — President Reagan`s failure to persuade the Bonn summit to set a date for world trade talks has produced few tears, either among America`s trading partners or in Congress.

French President Francois Mitterrand blocked agreement at the summit and kept the new trade round from starting next year, as Reagan had hoped. Mitterrand apparently acted for domestic political reasons, but there was a feeling that, as so often in the past, France had only said what everyone else was thinking.

What they were thinking, according to interviews just before the summit, was that new trade talks at this time might do more harm than good.

Some critics said the main barrier to world trade these days is the strong U.S. dollar, which a trade round wouldn`t consider. Others said some problems, such as Japan`s failure to buy more foreign goods, are built into national cultures that world trade talks can`t touch. Still others doubted that Third World countries would attend. There also were fears that the United States was rushing into talks without knowing what it wants.

Despite this, Reagan tried to talk his summit partners into opening the latest in a postwar series of trade talks in Geneva next year. Mitterrand vetoed the idea, basing his opposition on the need for prior monetary reform and on the damage that trade liberalization could do to France`s politically powerful farmers.

``The mood in Europe is not very enthusiastic,`` said Hugo Paeman, a spokesman for the European Common Market. The Europeans remain skeptical that the Reagan administration is willing to act to lower the value of the dollar, which they see as the main danger to the growth of world trade.

``To the administration, a new round of multilateral negotiations is the first priority in the trade area,`` said Sen. John Danforth (R., Mo.), chairman of the Commerce Committee. ``To me, a new round of negotiations belongs somewhere farther down the list.``

Danforth, like many senators, wants the dollar`s value to come down and the government to retaliate against allegedly unfair trade practices before Congress gives the President the so-called ``fast-track authority`` to negotiate in a new trade round.

The administration twisted arms around the world to try to win agreement for the trade talks, which, like the earlier rounds, would have been held in Geneva under the General Agreement for Tariffs and Trade (GATT), whose rules framed the postwar boom in world trade.

The administration argued that Congress, faced with a record $123 billion trade deficit last year, is increasingly protectionist and that only new trade talks can fend off damaging legislation.

To buttress its argument, the administration agreed reluctantly to discuss the dollar and the world monetary system at a separate conference. Paeman called this agreement a ``signal,`` even though the administration has not agreed to negotiate a new monetary system.

The administration hoped the trade talks would result in new rules for trade in agriculture and high-technology goods--two items barely touched in previous trade rounds--and would venture into the burgeoning area of trade in services: banking, insurance, accounting, airlines and the like.

Philip Trezise, economist at the Brookings Institution here, said the United States thinking on trade in services ``is not well defined.`` And Mark Anderson of the AFL-CIO agreed that ``there has been nowhere near enough preparation or analysis as to what we want to accomplish.``

``Services isn`t one single problem,`` Anderson said. ``Insurance is very different from the movies, transport very different from banking.``

Anderson also pointed out that what may appear to one country to be a barrier to trade in services--an immigration policy, for instance, or certification of doctors--may look like a rational policy to another.

A French diplomat pointed out that the United States wanted concessions mostly from the Europeans on agricultural trade, specifically a lowering of the high tariffs around the Common Market`s Common Agricultural Policy (CAP). On services, he added, the main concessions will be required of the Third World countries.

``But the United States will have to give up something to get this, and I wonder if enough thought has been given to this price,`` he said. Even to get such major trading nations as Brazil to the Geneva table would probably require an end to U.S. barriers against Brazilian steel, he said, adding that the powerful U.S. steel lobby may block this.

Other nations would ask for an end to U.S. protectionism on steel, textiles and footwear, and modification of government regulations on drugs and other imports.

``A new round is meaningless unless we have all nations there, including the LDCs (less-developed countries),`` he said.

``Is the United States willing to give on this?`` he asked. ``Is Congress willing to give on this?``

As for high tech, he said, everybody subsidizes exports.

``If we talk about removing these subsidies, there`ll be a smell of blood,`` he said.

European sources said the Common Market was willing to discuss its CAP, as long as there was no tampering with its ``principles and mechanisms.`` But it is precisely the CAP`s highly protectionist principles and mechanisms that the United States so dislikes.

Many sources doubted that GATT--a multinational organization that has successfully dealt with such obvious barriers as tariffs--can cope with more subtle barriers, such as health standards, distribution systems and bilateral quotas negotiated by countries outside the GATT framework. The administration shares some of this skepticism.

``Our concern is that it (GATT) is not keeping up,`` said Michael Smith, the deputy U.S. trade representative and a veteran trade negotiator.